Patent thicket

A patent thicket carries a negative connotation and is best described as "a dense web of overlapping intellectual property rights that a company must hack its way through in order to actually commercialize new technology,"[1] or, in other words, "an overlapping set of patent rights” which requires innovators to reach licensing deals for multiple patents from multiple sources."[2]

The expression may come from SCM Corp. v. Xerox Corp. patent litigation case in the 1970s, wherein SCM's central charge had been that Xerox constructed a "patent thicket" to prevent competition.[3]

Patent thickets are used to defend against competitors designing around a single patent.[4] It has been suggested by some that this is particularly true in fields such as software or pharmaceuticals, but Sir Robin Jacob has pointed out that "every patentee of a major invention is likely to come up with improvements and alleged improvements to his invention" and that "it is in the nature of the patent system itself that [patent thickets] should happen and it has always happened".[5]

Patent thickets are also sometimes called patent floods,[6] or patent clusters.[7] According to a report by Professor Ian Hargreaves, published in May 2011, patent thickets "obstruct entry to some markets and so impede innovation."[8] Patent thickets are said to have become[when?] common in fields like[vague]nanotechnology as more fundamental science is patented and some authors have expressed concern that this could reduce technological development and innovation.[9][10][11][12][13][14][15]

The economics of innovation literature suggests that patent thickets may have an ambiguous effect on patent transactions. On one hand, dispersion in the ownership of patents increases the number of patent owners with whom bargains have to be struck, and this may reduce the incentives to conduct patent transactions. But there is a second, countervailing effect: the presence of overlapping patent rights may reduce the value at stake in each individual patent licensing negotiation, and this may facilitate licensing deals.[16][17]

^"Patents and Pharmaceuticals", a paper given on 29 November 2008 at the Presentation of the Directorate-General of Competition’s Preliminary Report of the Pharma-sector inquiry, by the Rt. Hon. Sir Robin Jacob